Briefing: Residential will see a merging of boundaries

Across Europe, people are buying their first home much later than used to be the case. Part of the reason is affordability, but a precise lifestyle choice also plays a big part.

The dividing lines between residential asset classes will gradually be eroded as new products emerge which appeal to students as well as young professionals and business people, experts agreed at Investment Briefings’ European Student Housing & Micro Living panel, which was held in London last week.

‘In future all the name-tagging will disappear,’ said Rainer Nonnengässer, CEO of International Campus Group. ‘There will be products that satisfy the requirements of people who want to live in an urban environment with good facilities and communal areas.’ Students and young professionals have the same demands.

‘We find that students and young graduates like living together, there is no conflict of interest as they share the same interests and motivations and create a community,’ said Samuel Vetrak, CEO of Bonard, formerly known as StudentMarketing. ‘There is a strong potential for a product that combines student housing and micro living.’

Across Europe, people are buying their first home much later than used to be the case. Part of the reason is affordability, but a precise lifestyle choice also plays a big part. ‘Young people are more mobile, which is why we talk about digital nomads and Generation Rent,’ said Vetrak.

Urbanisation is leading to rapid demographic changes. Germany, for example, has a strong residential rental market which has traditionally had a family focus, with 90% of stock targeted at families.

Yet now in German cities single households represent 60-70% of the total, Nonnengässer said: ‘Young people, whether they are students or professionals, are looking for accommodation in the city and there is a massive imbalance, which is why rents have increased at double digits.’

European resi rental markets are very different – strong in Germany, for example, virtually non-existent in Italy and Spain – which means conditions and demands can vary from country to country, he said, ‘but there is one thing that all European markets have in common and that is the supply/demand imbalance.’